Auditors said that it is not clear who are behind this
menace and this dirty act. Auditors are again managed to write the story of
doubt which portrays a soft picture about continuing fraud so that top
officials who are mastermind behind tapering of the system are exonerated by
giving benefit of doubt.
Here the question is who used to control the technology and
the system?
Who are the officers entrusted to monitor the functioning of the system?
Were officers not tallying and matching the system generate bad debts from manually detected bad debts?
Whether branch Officials who are in direct touch with bad accounts did not point out the system fault to their immediate bosses?
Or top officials themselves managed the ill-motivated task at their end i.e. at central office ?
Each bank and each branch of the bank used to run and were supposed to run parallel manual exercise for detecting and identifying bad debts to synchronize the mechanized system of detection of bad debts until machine starts giving correct result.
Why banks failed to do such exercise and who are responsible for such gross negligence?
How the switch remained off for years and prudent officers could not sense it in time?
It gives stinking smell of the dirty intention behind such foul game.
It gives stinking smell of the dirty intention behind such foul game.
It is definitely not controlled by any junior or middle management
officer. Without concurrence and guidance of top officials, junior or senior
officers do not have courage to play with the well protected system.
Is it not true that top management of the bank willfully reduced NPA to present better balance sheet and then to ensure grand success of public issue which UBI had to bring in the market in the year 2010.
Will RBI call explanation of ED and CMD of last ten years and also assess and ascertain the type of culture they inculcated in the bank and type of culture they inherited from their previous banks to assess the character, knowledge and greed for money and post?
Will RBI also peep into the performance of those banks where from they were elevated to the post of ED or CMD?
RBI has ordered scanning of new loan accounts disbursed by new CMD, But result of such audit may not tell truth of the past loans which has turned NPA this year .
Is RBI trying to cover up the evils of past ED and CMDs who allowed and promoted bad culture for their vested interest ? Ti\his is being done willfully to demoralize present CMD of the bank in the same way Congress Party led UPA government is treating Kejriwal led AAP Government in Delhi.
If RBI punished a few ED and CMD who committed irregularities either in sanction or in monitoring , the message will go to other banks too and thing may improve at least from now.It is open secret that banks are still involved and indulged in bad lending and there is no doubt that bad loan will rise every quarters to come and in all public sector banks.
Will RBI order conduct of forensic audit of SBI where volume of bad debts run in lac of crore of rupees .
If RBI can protect loss arising from such bad assets,
I hope bank staff can be paid 1000% wage hike without creating any fall in their future profit.
Is it not true that top management of the bank willfully reduced NPA to present better balance sheet and then to ensure grand success of public issue which UBI had to bring in the market in the year 2010.
Will RBI call explanation of ED and CMD of last ten years and also assess and ascertain the type of culture they inculcated in the bank and type of culture they inherited from their previous banks to assess the character, knowledge and greed for money and post?
Will RBI also peep into the performance of those banks where from they were elevated to the post of ED or CMD?
RBI has ordered scanning of new loan accounts disbursed by new CMD, But result of such audit may not tell truth of the past loans which has turned NPA this year .
Is RBI trying to cover up the evils of past ED and CMDs who allowed and promoted bad culture for their vested interest ? Ti\his is being done willfully to demoralize present CMD of the bank in the same way Congress Party led UPA government is treating Kejriwal led AAP Government in Delhi.
If RBI punished a few ED and CMD who committed irregularities either in sanction or in monitoring , the message will go to other banks too and thing may improve at least from now.It is open secret that banks are still involved and indulged in bad lending and there is no doubt that bad loan will rise every quarters to come and in all public sector banks.
Will RBI order conduct of forensic audit of SBI where volume of bad debts run in lac of crore of rupees .
If RBI can protect loss arising from such bad assets,
I hope bank staff can be paid 1000% wage hike without creating any fall in their future profit.
Second question is whether the top officials of United bank of India were and are so much
ignorant about the health of high value loan accounts that they could not think it wise to test the correct working of their machines.
Whether it is not their duty to verify the correctness of the volume of bad debts. A true banker knows very well the prominent loan accounts which are sick in quality or on the verge of going sick.
Whether it is not their duty to verify the correctness of the volume of bad debts. A true banker knows very well the prominent loan accounts which are sick in quality or on the verge of going sick.
Rather it may be said without doubt that it is a well
planned way of concealing bad debts and this dirty game has been persisting in
almost all public sector banks since long. It is not a story of two or three
years as claimed by clever and managed auditors, it used to be there even when
machine or core banking solutions were not in place.
When CBS system technology was not in vague and manual
working was done in bank to identify bad debts, top officials of banks used to
say openly in meeting that none of branch head can declare any account as NPA
until they are permitted by top officials on phone. Not only this , if any courageous
officer dared defy the verbal guidelines of their bosses and used stick to RBI
norms in identification of bad assets , they had to bear the brunt of top
management . And without fail such sincere officers were rejected in promotion process
and got the most critical remote transfer orders.
Further it is not only a singular case of making less
provision to inflate profit of the bank, RBI is well aware how top officials of
the banks used to make lesser provision or make no provision for pension and
other terminal benefits to inflate profits.
When this fraud is detected now ,it is now crystal clear that in the past RBI officials
or officials of Ministry of Finance who were from behind the scene working in
collusion with top officials of the bank and who used to misguide in banker
meeting and who were protecting dirty game of bad bankers, allowed banks to
make lesser provision for residual terminal benefits and pension and amortized the
same in five years so that huge burden may not adversely affect the balance
sheet of a bank and tarnish the image of the bank. If bad news spreads in the
market, the share value could fall sharply and the wealth of many stalwarts could
vanish who had invested huge money in shares of the bank.
Obviously there is no doubt that the fraud which has been
detected by auditors in United Bank of India was committed by top officials of
the bank and it is the duty of regulating agencies and CBI to call for explanation
from Head of the bank and that from General Managers and Executive Directors
who were mastermind behind the dirty tricks during last decade. Further they should try to peep
into the balance sheets of other public sector banks so that the greatest scam
of the country could come on the floor and people of India may understand the
risk ahead.
All guilty, persons, whosoever it may be, heavy weight or
low weight officer, must be punished in the larger interest of the customers investors
as also staff working in the bank. Management of United bank has cheated investors by hiding bad assets , by making lesser provision and by showing inflated profit. Even SEBI should look into this fraudulent game with investors played by UBI when they came out with public issue in the year 2010..
Exposure of UBI management will open the eyes of Finance Ministers and politicians who has damaged the fundamentals of the bank by adopting vote bank policies and by pressurizing top bankers verbally to go for all such acts which adversely affects the profitability of the bank.
Exposure of UBI management will open the eyes of Finance Ministers and politicians who has damaged the fundamentals of the bank by adopting vote bank policies and by pressurizing top bankers verbally to go for all such acts which adversely affects the profitability of the bank.
Especially PC should be made to understand that if bank staffs
are not well paid and if bank staffs are not awarded for honesty and sincerity,
health of banks has to be bad.
If flattery is the only quality for promotion and respect, volume
of fraud and bad debts in government bank will continue to rise and endanger
the deposit of innocent common men who keep their hard earned money in
government banks only considering them safer than private banks.
Is bad loan menace at United Bank of India a cover-up after serious lapses? -Economic times-13.02.2014
Is the bad loan menance at United Bank of India a cover-up by the bank's management after serious lapses? Sources close to the development say, the report prepared by RBI-appointed forensic audit firm Deloitte suggests serious lapses on the credit appraisal and automated NPA detection system of the bank.
Sources also say that the report suggests that NPAs were not being detected for past two and half to three years. A senior banker in the know says, "the automated system that detects NPAs was found switched off, whether it was intentional or by mistake remains a big question." The Reserve Bank of India had appointed Deloitte to conduct a forensic audit on the bank.
United Bank of India sent shock waves across the banking sector when it reported gross NPAs at 10.89% in Q3, increasing its bad loans by nearly three times. However, sources in both the government and RBI maintain that the situation at United Bank of India does not pose a systemic risk. The bank has also been instructed to focus primarily on debt recovery and avoid any fresh loans especially on the corporate side.
Though the bank is dire need of capital, sources indicate that the government will not be in a position to infuse funds immediately, and this will most likely have to wait till the new fiscal starts.
UBI posted a net loss of 1238 crore rupees in Q3 compared with 42 cr net profit a year ago. Serious questions have also been raised on the bank's capital position. The bank's tier 1 capital has fallen to 5.6% as of Dec, 2013, which is below the minimum capital ratio stipulated by the RBI
Even in the past questions have been raised on the governance practices at public sector banks. Sources indicate that the RBI had requested the government to appoint a committee on the same, following which P J Nayak committee to review the governance of bank boards in India was set up in January this year.
Even in the past questions have been raised on the governance practices at public sector banks. Sources indicate that the RBI had requested the government to appoint a committee on the same, following which P J Nayak committee to review the governance of bank boards in India was set up in January this year.
Calls to United Bank of India's CMD by ET NOW remained unanswered.
There are directives of RBI to generate NPAs through system only. Banks have developed their own software through which they generate reports of actual NPAs but mark only those which suits them. Statutory Auditors support them. They reports "As informed by the Management & record made available to them......" It will be continued unless Govt. is interested to ensure it in letter & spirit by levying heavy penalty on the CMDs/EDs/GMs/respective DGMs in field
ReplyDeleteIt is the case of UBI but in fact this practice of NPA concealment prevails in all banks in one or other way at the behest of top executives. If the branch manager protests, he is threatened of dire consequences in the form of transfer to remotest place or non promotion. RBI should order the suitable audit. In present system of audit, the auditors are welcomed by banks like a VIP and the hospitality offered to them like a king to manipulate the figures. So, the auditors are equally responsible for such jugglery of figures.
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